By Judy McKinnon
Talisman Energy Inc., the big Canadian energy company being
acquired by Spain's Repsol SA, posted a wider fourth-quarter loss
Tuesday after booking nearly $1.4 billion of charges related to
slumping oil prices.
Still, Calgary, Alberta-based Talisman, which agreed in December
to be taken over by Repsol for around $8.3 billion, said
production, cash flow and capital spending for the year overall
were in line with guidance.
With oil prices down about 50% from levels in June, Talisman
said it partially impaired its investment in the Eagle Ford shale
play in Texas, taking a $614 million charge, and fully impaired its
investment in Block K44 in the Kurdistan region of Iraq, recording
a $234 million charge. Charges, which totaled $1.37 billion
overall, were also booked for assets in the North Sea and
Colombia.
Talisman posted a fourth-quarter loss of $1.59 billion, or $1.54
a share, in the fourth quarter, compared with a loss of $1.01
billion, or 98 cents, a year earlier. Its loss from operations,
which excludes items, widened to $143 million from $116
million.
Cash flow dropped to $508 million from $580 million, it said,
while production from ongoing operations edged up to 364,000
barrels of oil equivalent a day from 354,000 barrels a day a year
earlier.
Talisman, which owns shale acreage and offshore oil rigs, said
capital spending for 2014 totaled about $3 billion, down 5% from
2013.
Repsol's $8-a-share offer for Talisman in December came as
slumping oil prices drained the company of cash and weighed on its
share price. Talisman had been working to sell off assets to
lighten its heavy debt load amid declining commodity prices.
Talisman said Tuesday that regulatory approvals for Repsol's
takeover are on track and it continues to expect the deal to close
in the second quarter.
Write to Judy McKinnon at judy.mckinnon@wsj.com
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